Expert: State Budget revenues over-fulfillment has nothing to do with real GDP growth

ArmInfo.Over-fulfillment of the state budget revenues expected by Pashinyan's government has nothing to do with real GDP growth. This growth can not be ensured only with the help of taxes, Andranik Tevanyan, head of the Political Economy
Research Institute expressed a similar opinion to ArmInfo.

At the recent meeting in the government, Prime Minister Nikol
Pashinyan announced over-fulfillment of the budget revenue in 2019 by
62 billion drams. A decision has already been made to allocate 7
billion drams to the construction of roads, 6.8 billion to raise the
salaries of servicemen, 3.5 billion to increase teachers' salaries.
The decision on the remaining 45 billion drams has not yet been made.

"The problem rests in the absence of serious prerequisites for
economic growth, first of all due to the inconsistency of the
statements of the government with its own actions. The government
that calls on foreign partners to invest in Armenia, at the same time
calls on citizens to block the courts and this of course, does not
contribute to stability in our country and, accordingly, the
investment attractiveness. Given the existence of such risks, not a
single investor wants to invest in the Armenian economy, "Tevanyan is
convinced.

According to his estimates, no investments promised by Pashinyan have
been made yet in the Armenian economy. Instead, there are threatening
trends of increasing capital outflows, which only aggravates the
overall situation. One of the most illustrative examples, in the
expert's opinion, is the suspension of the Amulsar field development
project, as a result of which the Armenian budget has already missed
$ 100 million, not to mention cut jobs.

"However, the Central Bank continues to condition the projected 5%
GDP growth in 2019, including the growth of investment in the mining
industry. In particular, on the part of Amulsar, the regulator hopes
for the resumption of the project from the second half of 2019. In
this case, the reasons for creating obstacles to the implementation
of this project, at least, raise questions, the main addressee of
which is the government ", Tevanyan summed up.

According to the latest data from the National Statistical Committee
of Armenia, the republic's GDP in the first quarter of 2019 was 1
241.5 billion drams, 7.1% higher than the same indicator of 2018. It
is noteworthy that the main engine of GDP growth was the sector of
trade and services, which grew during the reporting period by 10.7%
to 712.1 billion drams. The growth of the construction sector was
9.2% to 43.8 billion drams, industry - by 0.4% to 256.3 billion
drams, agriculture - by 0.8% to 61.4 billion drams. The expected
economic growth in Armenia in the state budget for 2019 will be 4.9%.